Colegio de San Juan de Letran: College of Business Administration and Accountancy

Colegio de San Juan de Letran
COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY
CHAPTER V
INTERNAL ANALYSIS
The aim of this chapter is to provide the internal analysis of Pilipinas Shell Petroleum
Corporation, which strives to evaluate the firm's present status in the fields of profitability or
financial performance, production, human resources, operations and marketing, all of which are
crucial to understand when evaluating the business' strong and weak points. This will provide
individuals with a better grasp of the company's strengths and weaknesses. Findings pertaining
to the chosen topic will be highly beneficial to this study.
5.1 HUMAN RESOURCES AREA
Shell Human Resources plays a critical role in optimizing its company operations.
Human resources is a broad discipline at Shell, supporting change management,
designing and implementing team development programs, managing staff planning initiatives,
and promoting diversity and inclusion across the Shell community. HR provides an opportunity
for worldwide exposure and the start of a successful career in the energy sector.
Together with Shell's leadership, the Human Resources (HR) department ensures that
their managers and supervisors involve, empower, and encourage their employees to perform in
line with Shell's values and corporate principles.
Shell's human resources provide an exciting work environment that is ideal for people-
oriented professionals. HR provides a diverse variety of employment possibilities due to its
breadth of specializations.
Human Resources (HR) at Pilipinas Shell underwent a restructuring in 2018, with
operational responsibilities being transferred to Shell Business Operations (SBO). The most
significant improvement is an upgrade to self-service technology that enables more efficient and
focused human resource operations.
Additionally, line managers will have direct access to the SBO for recruiting and
turnover, while local HR will concentrate on strategic projects.
The improved human resources system enables quicker and simpler completion of
routine operational duties. Staff will be instantly linked to the relevant human resources adviser
through the HR Online Tool.
Pilipinas Shell is not new to taking a proactive attitude, since the company encourages
workers to take control of their professional growth. Employees, for example, actively engage in
Goals, Performance, and Evaluations established with their line managers; this serves as the
foundation for their mid-year and year-end performance evaluations. The Individual
Development Planning document articulates longer-term professional objectives.
What has changed with the new structure is that line managers now have more
responsibility, with human resources serving as a support function. Underperformance
management, corporate executives, assisted by human resources, conduct coaching and

engagement sessions. Additionally, line managers have the authority to initiate the departure of
retiring workers and the filing of job requests for recruiting for SBO action. This new strategy is
intended to improve the employee experience.
Source:
https://pilipinas.shell.com.ph/sustainability/pilipinas-shell-annual-sustainability-report-
2018/people-and-culture-doing-things-
right/_jcr_content/par/toptasks.stream/1557812605462/39b97449b61d4426bf3ddeadf1be47dd31
c6400c/people-and-culture-revised.pdf
https://www.shell.com.ph/careers/experienced-professionals/non-technical-careers/human-
resources.html
5.2 CORPORATE GOVERNANCE
Pilipinas Shell acknowledges the need of excellent corporate governance in its sustained
success, as stated in the Shell General Business Principles, which stays vital towards how
Pilipinas Shell operates their business. It deems its dedication to excellent corporate practices
and constant governance developments to be important to maintaining a competitive lead and
flourishing business functions. Accordingly, the objective of Shell is to incorporate honesty,
integrity, and respect for people. These are the important attributes of Shell companies. These
fundamental corporate values dictate the principles they employ among all operations, big or
little, and govern the conduct needed of each and every personnel in every Shell firm in all
circumstances. The establishment of good governance as a critical aspect in the Shell Group's
sustained development and prosperity is one of these concepts. As a result, the Corporation's
Board of Directors, Management, workers, and shareholders will make every effort to raise
awareness of the aforementioned principles inside the business.
Pilipinas Shell Petroleum Corporation fosters the faith and credibility of its many and
diversified stakeholders through its governance commitment. The Corporation's directors
specifically comply with their professional obligations of compliance, devotion, diligence, and
care, since corporate governance begins with the Board of Directors. Pilipinas Shell's corporate
governance is updated on a regular basis to reflect the best practices in their operations.
Commitment with corporate governance concepts and procedures is ensured by the newly
formed Corporate Governance Committee. After all, good corporate governance ensures a
company's long-term viability and success.
• Insider Trading Policy
The Corporation has adopted its own Securities Dealing Code, which clearly prohibits
insider trading, short term/swing transactions, unauthorized disclosure of inside information
(tipping), and trading in commodities/derivatives or shares of other publicly-traded companies
in the Philippines using inside information obtained through a connection with or employment
with the Corporation.
Source:
https://pilipinas.shell.com.ph/corporategovernance/corporate-
governancepolicies/_jcr_content/par/textimage.stream/1496638043870/3c0ec9e0818bdc93a7bcc
c1bdbd381f4a252127c/shlphsecurities-dealing-code-2017-02-17.pdf
https://pilipinas.shell.com.ph/corporate-governance/corporate-governance-
policies/_jcr_content/par/textimage.stream/1593681627966/7cf844752a4dee52d920a3ab1b630ff
462116a09/annual-corporate-governance-report-2019.pdf
• Anti-Corruption and Anti-Bribery Policy
The Corporation has anti-corruption policies and practices in place. By implementing an
anti-corruption policy and program in its Code of Conduct, the Board must form the basis and
take a position opposing fraudulent behavior. Furthermore, the Board shall teach personnel from
across business in order to integrate the policy and program into the company's environment.
The company has a strict anti-bribery and anti-corruption policy. Bribes and facilitation
payments of any kind are prohibited for all employees and third parties who represent the
company. Pilipinas Employees must declare observed, prospective, or actual conflicts of interest
in an online Code of Conduct Register, open to countermeasures as adhered to and authorized by
the staff's line management as appropriate. Their business associates are obligated to follow anti-
bribery and anti-corruption guidelines when working on the company's behalf. Their agreement
with them includes these necessities.
Source:
2018/good-governance-leading-with-
impact/_jcr_content/par/toptasks.stream/1557812599068/4fcbb734ee0cf8aab8e1540f40f6dc848
63ea2cb/good-governance-revised.pdf
• Conflicts of Interest Policy
The corporation guarantees that the personal interests of its workers do not clash with the
corporations. The fundamental concept to follow is that an employee's position cannot be used
to profit from or obtain some sort of benefit for themselves and/or their connected interests.
Employees are required to avoid circumstances that may jeopardize their impartiality. If an
employee has an actual or prospective conflict of interest, they must report it completely and
promptly and abstain from participating in the decision-making process. A director who has a
significant interest in a transaction affecting the Corporation is required to abstain from voting
on the transaction. A director who continues to have a substantial conflict of interest should
seriously consider withdrawing.
Source:
policies/_jcr_content/par/textimage.stream/1542091083633/3db39a3713abfca6bf9db826ac2544
d1df5cf1d0/pspc-corporate-governance-manual-nov-13.pdf
• Code of Conduct
Every staff, contract personnel, and contractor who serves for or in favor of Shell is
protected by the company's Code of Conduct. It outlines anticipated employee practices and how
they connect to the company's Business Principles and Core Values. It defines how Shell's
employees, contractors, and anybody else acting on their behalf must act in accordance with the
company's corporate principles. The Code of Conduct covers a wide range of topics, including
safety, anti-bribery and corruption, fair competition, and other essential topics.
Shell requires mandatory training and informs workers and contractors of the relevance
of both business principles and the Code of Conduct on a daily basis. Shell also expects its
contractors and suppliers to assure compliance with the company's strict standards.
Source:
https://pilipinas.shell.com.ph/about-us/our-values.html
• Anti-Sexual Harassment and Safe Spaces Policy
To maintain its fundamental principle of respect for people, Shell shall ban all kinds of
sexual harassment in its workplaces and across its commercial ventures. The business is
unwavering in its dedication to a sexual harassment-free environment. Individuals' mental
health, integrity, and self-esteem must always be protected in the workplace.
• Whistleblower Policy
Personnel, company associates, and other external stakeholders at Pilipinas Shell are
encouraged to stand out if they encounter something that appears to be immoral. Workers have a
responsibility to report suspected Ethics and Conduct incidents to the Helpline, their line
manager or any other company leader, the Country Ethics & Compliance Manager, legal
counsel, or Human Resources.

To maintain confidentiality and anonymity, the Helpline is managed by a third party.
Furthermore, Pilipinas Shell will not accept any retaliation against anybody who expresses a
legitimate concern about a probable infringement or cooperates with an investigation. Any act of
retribution or threat of reprisal against such workers will be considered a major violation of the
company's Code of Conduct.
Source:
• Policy Statement on Human Rights
The Company supports the Ten Principles on human rights, labor rights, anti-corruption,
and environmental preservation as a founding member of the UN Global Compact Network
Philippines. In all areas of their company, they insist on honesty, integrity, and respect for
people, and demand the same of their partners.
Source:
• Policy on Related Party Transactions
The company's policy on related party transactions would be applicable to dealings with
Related Parties, including the Parent Firm, affiliates and allies, subsidiaries and fellow
subsidiaries, joint ventures, Directors and Officers and their spouses and family inside the fourth
civil degree of consanguinity or affinity, legitimate or common-law, major shareholders or
persons/entities linked with such directors, officers, or major shareholders shareholders of the
company. This policy applies only to transactions between the Company and the Shell Group
that are required for the Company's daily operations.
Source:
https://pilipinas.shell.com.ph/corporate-governance/board-
committees/_jcr_content/par/expandablelist/expandablesection_2070877671.stream/156586551
8514/e797463e090bf964d6811fc9edbf134b9c4e2193/sec-related-party-transaction-policy.pdf
• Environmental, Social, and Governance (ESG) Policy
Shell abide by the Securities Regulations Code and its implementing rules and
regulations; the Philippine Stock Exchange's (PSE) Listing and Disclosure Rules; and their own
Revised Corporate Disclosure Guide. The Board of Directors ensures that important information
about the Company is disclosed fully, with a growing emphasis on non-financial and
sustainability reporting. Notably, the CSR committee, which oversees activities related to health,
safety, security, the environment, and social performance (HSSE&SP), also evaluated the
report's content before release.

Source:
• Policy on Health, Safety and Welfare of Employees
Shell's license to function is based on safety, and the company aims to maintain good
health and safety protocols in the environment to protect its employees, property, and the
communities in which it functions. Pilipinas Shell prioritizes safety and incorporates it into all of
its operations. The "Goal Zero" main objective is to have no fatalities, accidents, or threats to the
company's neighbors or premises. Personal, process, and transportation safety are the three
categories of safety hazards with the largest risks in order to attain Goal Zero.
Pilipinas Shell strives persistently to enhance its safety culture, concentrating on concern
for individuals and leadership dedication, in order to achieve Goal Zero. A skilled workforce
complements a robust safety culture. Pilipinas Shell guarantees that those in charge of tasks
posing a substantial safety risk are properly trained and skilled.
Source:
https://pilipinas.shell.com.ph/sustainability/health-and-safety.html
• Employee Training and Development Policy

Shell understands that investing in their workers' development benefits not just their
personal progress, but also the success of their company.
Shell provides assistance and training to its workers in order for them to grow and
develop, recognizing the critical role each employee has in their success.
They provide excellent instructional tools to their workers. There is a strong focus on
personal growth, as well as professional advancement based on potential. They have a
performance assessment cycle and a variety of development tools that are reviewed on a regular
basis by workers and their line managers.
Shell provides both internal and external training programs, as well as a variety of formal
leadership programs, some of which include chances for overseas training. Their technical and
leadership development programs are widely regarded as being among the best in the business.
Shell Open University is the company's online education platform. It includes a diverse
selection of practical, commercial, and technical learning resources, ranging from online courses
and webcasts to e-books and manuals. Shell also acknowledges the value of external study and
professional certification and therefore contributes to the expense and time commitment
associated with pursuing appropriate further education.
Shell is dedicated to providing its workers with the assistance they need. Shell assists
workers in achieving personal and professional objectives via on-the-job learning and training,
as well as mentorship and professional development.
Source:
https://www.shell.com.ph/careers/shell-commitment-to-diversity-inclusion/supporting-you-
when-it-counts/training-and-development.html
• Product Quality and Responsible Innovation
Pilipinas Shell's Shell Quality and Quantity Vans take product quality assurance on the
road (SQVs). Surprising product quality and quantity testing is carried out by the SQVs at Shell
retail stations across the country. At specified retail stations, the SQV team tests and analyzes
gasoline and diesel goods against Shell product standards. They can calibrate dispensers in
accordance with local legislation regarding volume delivery tolerances, as well as measure pump
meter readings to reconcile periodic sales versus withdrawals or fuels purchased on-site. The
SQV team sends the Operational Excellence Manager a monthly visit plan, as well as condensed
weekly findings to the Sales and Operations Districts through the Territory Managers. The SQV
team may train merchants to repair minor faults on-site, such as malfunctioning cam locks,
pump meters, or over- and under-dispensing pumps, after providing them with the findings of
the testing. The banner "Tiwala Ka Sa Shell" can be prominently displayed at any station that
passes the SQV exam.
Source:
https://pilipinas.shell.com.ph/sustainability/pilipinas-shell-annual-and-sustainability-report-
2017/vanguards-of-product-quality.html
5.3 CORPORATE SOCIAL RESPONSIBILITY

Pilipinas Shell strives to be a leader in community outreach by treating local
communities with dignity and respect, cultivating positive relationships and rapport with local
governments, and integrating industry best practices and eco-friendly technology in its
downstream oil business, all while pursuing the underlying corporate goals of value creation.
Pilipinas Shell collaborates closely with its social development division, Pilipinas Shell
Foundation Inc. ("PSFI"), on its numerous corporate social responsibility (CSR) programs. The
partnership between Pilipinas Shell and PSFI has over 30 years of experience spearheading and
managing award-winning national and state social development programs varying from
leadership training and behavior development to technical, vocational, and agricultural capacity
training, mentoring, and employment; healthcare and services, sanitation, and safety; livelihood
and entrepreneurship development; and environmental stewardship.
Source:
https://pilipinas.shell.com.ph/sustainability/communities.html
• Pilipinas Shell Foundation - Roots To Shoots Program
In conjunction with the Manila Water Foundation (MWF) and World Vision
Development Foundation, Pilipinas Shell Foundation has initiated its health and nutrition
initiative Roots to Shoots in two province towns to prevent growth stunting among children in
Camarines Sur (WVDF).
Disease-related malnutrition is one of the leading causes of growth retardation.
According to the National Nutrition Council, one out of every three children in the Philippines
has stunted growth, making it the fifth-highest rate in the East Asia and Pacific Region. Stunting,
particularly in the first 1000 days of a child's life, can result in poor academic achievement and
an increased risk of illness. The Roots to Shoots program will discuss growth stunting by
deterring malnourishment in Bombon and Pasacao through exercises such as food security,
setting up WASH (Water, Sanitation, and Hygiene) facilities, and conducting breastfeeding and
nutrition sessions among child caregivers, all of which are inspired by how plants absorb vital
nutrients at their roots in order to grow.
The subject of RTS is connected with the national government's National Nutrition
Month "Batang Pinoy SANA TALL. Iwas Stunting, SAMA ALL," which emphasizes that stunting
is a curable sickness if parents have adequate nutrition, health, and social assistance in the first
1000 days of rearing a kid, according to the study. Communities must create resilience against
health threats and the spread of diseases like COVID-19 now more than ever. It all begins with
proper medical care and adequate nourishment. You may learn more about the Roots to Shoots
program by visiting each organization's social media sites.
Source:
https://pilipinas.shell.com.ph/media/current-year-press-releases-news/pilipinas-shell-foundation-
program-prevents-growth-stunting-among-cam-sur-kids.html
• Philippine Global Road Safety Program
Collaboration with different local communities on Project KALSADA (Kabataang Ligtas
sa Sakuna at Disgrasya), a Road Safety Program for children of schools situated along highways
near the Tabangao refinery and in other areas such as Pandacan, Manila, Palawan, and Bacolod.
The Philippine Global Road Safety Program ("PGRSP") was co-founded by Pilipinas Shell.
PGRSP is a non-governmental organization whose goal is to promote road safety in the

Philippines. Over the years, Pilipinas Shell has been an active member and industry leader in
sharing its best practices in road safety.
Source:
https://pilipinas.shell.com.ph/sustainability/communities.html
• Shell-PhilDev Scholarship Programme
PSFI (Pilipinas Shell Foundation, Inc.) is a strong supporter of young people's ambitions.
PSFI has been assisting scholars pursuing STEM (science, technology, engineering, and
mathematics) courses from several colleges and institutions across the country since 2013 in
collaboration with the Philippine S&T Development Foundation – Manila, Inc. (PhilDev). This
effort provides a significant scholarship to assist Filipino students in realizing their academic
potential, allowing them to innovate and produce innovations, products, and services that can
compete in global markets and help the Philippines thrive economically.
Source:
https://www.shell.com.ph/sustainability/communities/social-investment-
programmes/psfi/programmes.html
• Shell and BFP strengthens partnership for Fire Safety Improvements

Pilipinas Shell Petroleum Corporation and the Bureau of Fire Protection (BFP) have
extended their cooperation to execute fire safety and emergency response efforts inside both
companies, as well as to provide safety programs for external communities and groups.
This demonstrates Pilipinas Shell's dedication to maintaining the safety of all aspects of
its operations, thus safeguarding its customers and communities. Additionally, this renewed
collaboration launched "KAISA: A Call to Action Against Destructive Fire Campaign," a BFP
project that promotes active involvement of many social sectors in fire safety and prevention.
Source:
https://pilipinas.shell.com.ph/media/current-year-press-releases-news/shell-and-bfp-strengthens-
partnership-for-fire-safety-improvements.html
• Shell’s “Unlad sa Pasada”
Pilipinas Shell Foundation, Inc. has established Shell's Unlad sa Pasada, a nationwide
scholarship program for dependents of active Shell Pepeng Pasada Club (PPC) members (PSFI).
On November 19, 2012, the Shell Unlad sa Pasada scholars graduated at Shell House in Makati
City.
"The Shell Pepeng Pasada Club (PPC) looks after its members who work in the
transportation industry, as well as their families. Pantisha Lekhavata, Pilipinas Shell Payment
and Loyalty (PayLo) Manager, remarked, "This is the only program of its sort in the Shell
companies internationally, and I'm proud to be a part of it." "It clearly symbolizes the Filipino
value of 'bayanihan,' as well as Shell's belief in empowering today's youth for tomorrow's
future." Unlad sa Pasada aims to boost the productivity of Filipino youth so that they can
contribute to the nation's development. "By helping yourself, you benefit your community," said
Chris Alli, Pilipinas Shell's South Luzon District Manager. "Blessings aren't easy to come by.
You'll have to work hard for them, but I see that you all have the patience and determination to
achieve whatever it is you want in life.
Source:
https://www.shell.com.ph/media/media-releases/2012-media-releases/shell-helps-create-
opportunities-for-unlad-sa-pasada-scholars.html
• Shell LiveWIRE
Shell also assists the SIBBAP-MPC, a women-led social business located in Barangay
Ambulong, via Shell LiveWIRE, their specialized livelihood development initiative. SIBBAP-
MPC assists women in their local community in generating money via the manufacturing of
garments, the operation of a community bakery and consumer shop, and even a learning center.
They also have other indirect investments which greatly benefitted neighbouring
communities. In 2019, they secured and awarded land titles for 82 families which relocated to
Barangay Malitam, helping settle their concerns regarding land ownership. They also
contributed significant infrastructure projects that boosted mobility and access to market. For
one, the bridge that connects Barangays Libjo and San Isidro was a result of the Shell Tabangao
Asset Renewal (STAR) project, which was completed in 1994.
Source:
https://pilipinas.shell.com.ph/sustainability/pilipinas-shell-annual-sustainability-report-2020/the-
future-of-tabangao.html
• Employee Engagement Activities
Employees can share criticism through regular employee engagement events. The annual
Shell People Survey is the primary tool for measuring employee engagement, connection and
loyalty to Shell, and, most significantly, contentment with management and leadership quality.
The company understands that their employees are the heart of the business. To attract, develop,
and retain world-class talent, they strive to strengthen their employee value provision.
To sustain the culture of care and safety, the company involves them through a variety of
programs. Their employees are critical to Pilipinas Shell's success. They endeavor to attract,
develop, and retain such great individuals, as well as to consistently support and raise their
performance to a worldwide standard, and to keep the company healthy, productive, and stable.
Source:
2018/people-and-culture-doing-things-right.html
• Developing Sustainable Energy
Pilipinas Shell promotes energy efficiency as the easiest and most cost-effective
approach to combat climate change—through driver education, fuel-efficient driving behavior,
better transportation cooperation, and strategic collaborations with relevant organizations. As
Pilipinas Shell strives to fulfill the world's future energy requirements via a diverse energy mix
and cleaner energy, it encourages individuals and companies to save energy more efficiently, to
do more with less, and to make energy conservation a lifestyle choice.

The aim of the Shell Eco-marathon Asian leg is to educate consumers about the
advantages of sustainable transportation in their daily lives. The program is an unique fuel-
efficiency initiative that brings together engineering students from around Asia to design and
construct cars of the future. Pilipinas Shell sponsored this groundbreaking worldwide project
from 2014 to 2016 in Manila's historic Rizal Park, educating thousands of schoolchildren and
the general public about smarter transportation and the future of energy.
Source:
https://pilipinas.shell.com.ph/sustainability/environment.html
5.4 MARKETING AREA
5.4.1 Products
Fuels - The fuel company of Pilipinas Shell Petroleum Company consists of Shell
FuelSave Gasoline, Shell FuelSave Diesel, and Shell V-Power. Previously, fuel efficiency
formulations were primarily focused on maintaining key engine components like intake valves
clean. Special detergents are still being added to our Shell FuelSave Gasoline mix, which may
assist keep intake valves clean. Shell FuelSave Diesel is a high-performance fuel that is
scientifically engineered to ignite and burn more efficiently than conventional diesel, helping
to enhance engine efficiency and fuel economy. Shell V-DYNAFLEX Power's Technology is
a game-changing innovation that may help safeguard your engine. Shell V-Power, the only
gasoline co-engineered with Ferrari and approved by them, is intended to provide our best
performance in both laboratory and on-road testing.

Lubricants - The Shell Lubricants brand is marketed through their Shell Retail
stations. This consists of Shell Helix Oil Change +, Shell Helix, Shell Rimula, and Shell
Advance. Shell Helix Oil Change+ is a one-of-a-kind experience that makes routine car
maintenance a breeze. Customers may experience world-class service without breaking the
budget with a variety of Shell Helix motor oils suited for varied requirements of old and
modern vehicle engines, coupled with great service from well-trained specialists. Whatever
your driving difficulties, Shell Helix engine oils are intended to handle them. The Shell Helix
line includes an oil for every engine, from the first synthetic motor oil made from natural gas
to premium multi-grade oils for daily driving. Shell Rimula is one of the solutions that helped
establish Shell as a worldwide leader in power and energy, pioneering breakthrough lubricant
technology, smarter products, and energy-efficient engineering solutions that ultimately
support cleaner energy, better mobility, and a sustainable energy future. Shell Advance is a
range of motorcycle and scooter engine oils that offers optimum protection while keeping the
machine operating smoothly and responsively.
Non-Fuel Offering - There are two non-fuel services offered by Shell and that is Shell
Select and Deli-to-Go. Shell Select has a diverse selection of snacks, beverages, groceries,
newspapers, magazines, and hot meals.
5.4.2 Price
Royal Dutch Shell has targeted nations and business entities to satisfy their energy
demands, as well as people seeking to meet their home energy requirements through petrol and
diesel. Because the majority of goods in the oil and gas industry are controlled by the
government and market trends, the firm is compelled to maintain its pricing strategy in
accordance with them. It makes an effort to maintain a policy that benefits both the business and
its customers.
FUELS
GASOLINE
Retail Prices Weight
H. Power P 3,960 4L
H. Protect P 3,960 4L
Helix Ultra P 3,670 4L
Helix Hx8 P 3,085 4L
Helix High Mileage P 2,255 4L
Helix Hx3 G P 1,300 4L

Helix Hx3 Sae 30 P 1,280 4L
DIESEL
H. Power P 6,050 6L
Helix Ultra P 5,600 6L
HELIX
Helix Ultra P 849 1L

Helix Ultra Diesel P 850 1L
Helix Hx7 P 415 1L
Helix Diesel Hx7 P 424 1L
Helix Hx5 P 295 1L
Helix Diesel Hx5 P 285 1L
Helix Hx3 G P 206 1L
Helix Hx3 P 202 1L
Helix High Mileage P 432 1L
Helix High Mileage Diesel P 442 1L
Helix Hx8 P 661 1L
Helix Hx8 Diesel P 664 1L
H. Power P 920 1L
H. Protect P 920 1L
HELIX
Helix Ultra Diesel P 5,051 6L
Helix Diesel Hx7 P 2,546 6L
Helix Diesel Hx5 P 1,680 6L
Helix Hx3 G P 798 4L
Helix Hx3 P 774 4L
Helix High Mileage Diesel P 2,653 6L
Helix Hx8 Diesel P 3,946 6L

H. Power P 3,666 4L
5.4.3 Distribution
Supply and Distribution
The Company's supply and distribution sector runs a comprehensive supply chain
network that coordinates the acquisition, import, storage, and distribution of refined petroleum
products through various means of transportation, including ships and vehicles. This integrated
supply chain guarantees that Shell clients receive fuel and specialty products in a safe, timely,
dependable, and efficient manner, while also optimizing storage and transportation operations.
Primary distribution, storage terminals and warehouses, and secondary distribution are the three
basic components.
Vessels transporting fuel products from the Company's refinery and other import
facilities for distribution to the Company's storage terminals make up the principal distribution
channel. Our access to fuel storage terminals and supply points, warehouses, and import
facilities across the country underpins our supply chain integration, allowing Pilipinas Shell
Petroleum Corporation to provide its commercial and retail customers with the volume and
quality consistency and reliability they expect. Finally, vessels shipping petroleum products to
major commercial clients, as well as road tankers serving both retail outlets and direct
customers, make up the secondary distribution system.

Source:
https://pilipinas.shell.com.ph/about-us/what-we-do.html
5.4.4 Promotion
Pilipinas Shell Corporation, a downstream oil refining and marketing company, has
consistently gained new consumers through various campaigns and promotions. Shell Go+
Member Special! is a famous exclusive campaign offered by the firm, in which members
receive exclusive offers when they gas up! Furthermore, the company's products gained
popularity and attracted a large number of customers thanks to their advertising and promotion
techniques, which included commercials, newspaper ads, and highway billboards. Furthermore,
Pilipinas Shell Corporation selects celebrity endorsers who are current with current topics and
popular with the general public, such as Maine Mendoza, Coco Martin, Drew Arellano, and
others. From the perspective of the public, the company has established a solid reputation and
branding, which surely leads to better quality.
5.5 PRODUCTION AND OPERATIONS AREA
• Stakeholders Oriented
Pilipinas Shell understands that it owes it to its stakeholders to express the issues and
concerns that are most important to them. They run their business in such a way that regular
criticism, debate, and involvement with their stakeholders is essential to our reporting process.
Pilipinas Shell understands the importance of exceeding our customers' expectations. They try
to create and provide products and services that not only meet customer needs in terms of
quality and pricing, but also adhere to local and international safety and environmental
regulations.
In terms of its business partners, the company is looking to form mutually beneficial
collaborations. They collaborate with businesses that share the same values and promote the use
and implementation of the Shell General Business Principles, or their equivalents. The company
also strives to be the preferred employer. To that aim, they provide a safe and healthy working
environment, fair employment terms, and respect and protect their employees' human rights.
Lastly, the company has a responsibility to safeguard their shareholders' interests and provide
robust, long-term competitive returns.
Source:
2018/_jcr_content/par/toptasks.stream/1557812623649/3bc4993bea2daa61d2a813482c871c3a5
8a2e5b6/asr-full-report.pdf
• Production and Process Control
Shell's oil and gas production business is centered on production operators. Their
employees may be found operating in day-to-day oil and gas production activities in assets
owned by one of their Operating Units all over the globe. This also covers the commissioning
and startup of their newly developed oil and gas fields. Their employees contribute to new
initiatives and field development planning in order to guarantee the safe and optimum operation
of their future facilities.
Source:
https://www.shell.com.ph/careers/experienced-professionals/technical-careers/production-
engineering/production-operations.html
• Workplace Safety
Shell prioritizes the health and safety of its employees, clients, and the community, as
well as the safe running of all of their companies, as the spread of COVID continues to affect
everyone in the country. The company continues to keep a careful eye on the situation and
respond to the demands of their "kababayans." PSPC, in collaboration with the City of
Mandaluyong and Reliance United, has recently initiated an immunization program for its
employees and their dependents. PSCP's immunization program is part of the organization's
attempts to safeguard its employees and their dependents from COVID, as well as the
government's goal of achieving epidemic immunity for the country. And for its customers,
despite the difficulties, the company aims to continue supplying essential energy products to its
customers and communities, and they have business continuity measures in place to keep the
operations running.
Source:
https://www.shell.com.ph/covid19.html
• Diverse and Inclusion
Shell established a method for selecting directors and employees that are capable of
adding value and exercising independent judgment in developing good company goals and
policies. They established a board diversity policy, which may encompass gender, age, ethnic
origin, culture, skills, competency, and knowledge diversity.
Source:
policies/_jcr_content/par/textimage.stream/1542091083633/3db39a3713abfca6bf9db826ac2544
d1df5cf1d0/pspc-corporate-governance-manual-nov-13.pdf
5.6 FINANCIAL PERFORMANCE
This chapter will illustrate the financial performance of Pilipinas Shell Petroleum
Corporation's various ratios. The following ratio is centered on PSPC's productivity over the last
three years, from 2018 to 2020. Every year, the financial reputation in the industry is evaluated,
as well as how it has changed over time.
5.6.1 Growth Ratio
Figure 6. (in ₱ millions)
ASSET
2018 2019 2020
Pilipinas Shell ₱80,166 ₱102,919 ₱86,550

Petroleum Corp.
REVENUE
2018 2019 2020
Pilipinas Shell
₱218,869 ₱219,267 ₱157,669
Petroleum Corp.
NET INCOME
2018 2019 2020
Pilipinas Shell ₱5,076 ₱5,621 ₱-16,182

Petroleum Corp.
Analysis for Pilipinas Shell Petroleum Co. Growth Ratio:
Pilipinas Shell Petroleum Co. in all figures in the growth ratio indicate the assets,
revenue and net income. Yearly, their net income has increased consistently in the past 2 years,
though it declined in the year 2020 due to the pandemic.PSPC's marketing tactics must be
maintained or improved in order to sustain its net income growth.
5.6.2 Profitability Ratio

GROSS PROFIT MARGIN RATIO
Figure 9.
GROSS PROFIT MARGIN RATIO
2018 2019 2020
Pilipinas Shell 0.1 1.7 2.2

Petroleum Corp.
Pilipinas Shell Petroleum Corp.'s gross profit margin ratio represents the markup on their
services and products. It is calculated by deducting the sales to cost of goods sold and dividing
the total of it to sales. According to the graph above, the gross profit ratio has been increasing
since 2018. The gross profit ratio shown for the year 2018 is 0.1. It then rises to 1.7 in 2019 and
continues to rise to 2.2 in 2020. The graph above also shows Petron's Gross Profit Margin Ratio,
which is Shell's top competitor, to distinguish both companies' gross profit margins.
Source:
https://www.wsj.com/market-data/quotes/PH/XPHS/SHLPH/financials/annual/income-statement
NET PROFIT MARGIN RATIO
Figure 10.
NET PROFIT MARGIN RATIO
2018 2019 2020
Pilipinas Shell 2.319 2.5737 -10.31

Petroleum Corp.
It measures the overall profit of the company. It also determines how profitable a certain
company is. It is computed by subtracting the net profit margin ratio to net income, divided by
sales. For PSPC, the net profit margin ratio is inconsistent. The highest net profit ratio is shown
in the year 2019 but shows an inconsistent decrease in 2018, and 2020.
RETURN ON ASSET
Figure 11.
RETURN ON ASSET
2018 2019 2020
Pilipinas Shell 0.1 0.1 -0.2

Petroleum Corp.
Return on assets (ROA) is a measure of a company's profitability in relation to its total
assets. The return on assets (ROA) tells a manager, investor, or analyst how well a company's
management is utilizing its assets to produce profits. It is calculated by dividing the net income
to the total assets. Pilipinas Shell Petroleum Corp. had a strong ROA in 2018, with a value of
0.1. It remained the same in 2019 which is 0.1. However, it plummeted to -2.0 in 2020.
RETURN ON EQUITY
Figure 12
RETURN ON EQUITY
2018 2019 2020

Pilipinas Shell 13.025 14.113 -68.48
Petroleum Co.
The Return on Equity (ROE) is considered to be the return on the net assets. It measures
how profitable a certain company is in relation to the stockholders’ equity. It is calculated by
dividing the net income to the stockholders equity. For Pilipinas Shell Petroleum Co., the ROE is
high in the year 2018 and shows a minimal increase in 2019, but had a great loss in the year
2020.
5.6.3 Liquidity Ratio
CURRENT RATIO
Figure 13.
CURRENT RATIO
2018 2019 2020
Petroleum Corp.
The current ratio is a liquidity ratio that assesses if or not a business can fulfill its short-
term debts. It is calculated by analyzing a company's current assets and liabilities. The current
ratio of PSPC for the year 2018, equal to 1.4, which then decreased to 1.2 in 2019 and equal to
0.9 in 2020. The current ratio of Pilipinas Shell Petroleum Corp., based on the table above,
implies that the firm has sufficient liquid assets to cover its obligations. Moreover, the findings
are similar enough, indicating that PSPC has adequate assets and a favorable fiscal image in the
perspective of customers and possible investors. As a result, PSPC can maintain its range and
function continuously.
QUICK RATIO
Figure 14.
QUICK RATIO
2018 2019 2020
Petroleum Corp.
A quick ratio is a financial ratio that determines how well a company's current assets will
support its current liabilities. Because it removes some of the components that are included in
the current ratio, it is a more conservative indication of liquidity. By reducing inventories and
other less liquid assets, it focuses on the company's more liquid assets. The acid-test ratio,
commonly known as the quick ratio, is calculated as follows:
Quick ratio = Total current assets - Inventory / Total Current Liabilities
Pilipinas Shell Petroleum Corp. has a quick ratio of 0.7 in 2018, 0.6 in 2019, and will
remain the same in 2020, according to financial data. It means the company has enough liquid
assets to cover its liabilities. However, the PSPC must remember that its quick ratio must not go
below its current ratio, as this could suggest a problem with its inventory account.
5.6.4 Leverage Ratio
LONG TERM DEBT TO EQUITY RATIO

Figure 15.
LONG TERM DEBT TO EQUITY RATIO
2018 2019 2020
Petroleum Corp.
The long term debt-to-equity ratio is computed by dividing a company's total liabilities
by its shareholder equity to determine its financial leverage. According to the financial data
supplied, the PSPC has a low debt to equity ratio. As stated above, the debt to equity ratio in
2018 was 0.1. By 2019, it had risen to 0.2 and had increased quickly to 0.4 in 2020. If the final
ratio is equal to 1, it signifies that both creditors and owners provided the same amount of
capital. The amount of risk taken on by creditors increases when this ratio rises over 1,
indicating a loss in solvency since creditors' contributions to the company's total assets exceed
the amount given by the owners.
ACCOUNTS RECEIVABLE TURNOVER RATIO
Figure 16.
ACCOUNTS RECEIVABLE TURNOVER RATIO
2018 2019 2020
Petroleum Corp.
Accounts receivable turnover ratio, also known as the "receivable turnover" or "debtors
turnover" ratio, is a financial statement performance ratio (specifically, an operation financial
ratio). It assesses how easily and efficiently a business turns its account receivables into cash
over the course of a financial year.
As centered on the above-mentioned calculations, generally, Pilipinas Shell Petroleum
Co. has a high number of results. The higher the number, the better. It indicates that CNPF
clients pay on time and that the business is adept at debt collection.
5.6.5 Efficiency Ratio
INVENTORY TURNOVER RATIO
Figure 17.
INVENTORY TURNOVER RATIO

2018 2019 2020
Petroleum Corp.
The Inventory Turnover Ratio highlights that a company's inventory turnover is
measured in terms of how many times it is sold and replaced. It's calculated by dividing the
company's Cost of Goods Sold by the Average Inventory. According to the graph above,
Pilipinas Shell Petroleum Corp. had an inventory turnover ratio of 11.1 in 2018 and 8.6 in 2019.
In 2020, it grew to 15.7. The ideal inventory turnover ratio for most industries is between 5 and
10, implying that the company will sell and refill inventory every one to two months. As a result,
the PSPC's inventory is effectively sold.
AVERAGE COLLECTION PERIOD RATIO
Figure 18.
AVERAGE COLLECTION PERIOD RATIO
2018 2019 2020
Petroleum Corp.
In terms of accounts receivable, the average collection period is the time it takes for a
company to recover payments owed by its customers (AR). The average collection period is used
by Pilipinas Shell Petroleum Co. to ensure that they have enough cash on hand to fulfill their
financial obligations. Hence, it is calculated by dividing the average balance of accounts
receivable by total net credit to get the average collection period.
TOTAL ASSETS TURNOVER RATIO
Figure 19.
TOTAL ASSETS TURNOVER RATIO
2018 2019 2020
Pilipinas Shell Petroleum 2.7 2.1 1.8
Corp.
The asset turnover ratio, also known as the total asset turnover ratio, is a metric that
measures how efficiently a company generates money from its assets. The asset turnover ratio is
calculated by dividing net sales by the total or average assets of a corporation. It was 2.7 in
2018, 2.1 in 2019, and 1.8 in 2020. According to the preceding data, Pilipinas Shell Petroleum
Corp. has a high asset turnover ratio, indicating that it outperforms its competition.
5.6.6 Vertical Analysis
2018
Amount Percent
Sales ₱ 218,869.00 100%
Less: Cost of Goods Sold ₱ 196,987.00 90%
Gross Profit ₱ 21,882.00 9.99%

Less: Operating Expenses ₱ 13,085.00 5.98%
Earnings Before Interest and

₱ 8,797.00 4.02%
Taxes (EBIT)
2019
Amount Percent
Sales ₱ 218,403.00 100%
Less: Cost of Goods Sold ₱ 198,734.00 90.99%
Gross Profit ₱ 19,669.00 9.001%

₱ 8,940.00 4.09%
Taxes (EBIT)
2020
Amount Percent
Sales ₱ 157,669.00 100%
Less: Cost of Goods Sold ₱ 157,155.00 99.67%
Gross Profit ₱ 514.00 0.33%

-₱ 9,408.00 -5.97%
Taxes (EBIT)
The vertical analysis is a way of analyzing financial statements that classifies each item
as a percentage of the statement's base figure. On the first line of the report, the base amount is
always presented at 100 percent, with each following line item representing a percentage of the
total. Within a financial statement for a single period of time, Pilipinas Shell Petroleum Corp.
frequently utilizes vertical analysis to see the relative proportions of account balances.
5.6.7 Horizontal Analysis
2020 2019 Percent
Sales ₱157,669.00 ₱218,403.00 7.22%
Less: Cost of Goods Sold ₱157,155.00 ₱198,734.00 7.91%
Gross Profit ₱514.00 ₱19,669.00 2.61%

Less: Operating Expenses ₱9,922.00 ₱10,729.00 9.25%

-₱9,408.00 ₱8,940.00 -1.05%
Taxes (EBIT)
2019 2018 Percent
Sales ₱218,403.00 ₱ 218,869.00 9.78%
Less: Cost of Goods Sold ₱198,734.00 ₱ 196,987.00 10%
Gross: Profit ₱19,669.00 ₱ 21,882.00 8.99%
Less: Operating Expenses ₱10,729.00 ₱ 13,085.00 8.19%
Earnings Before Interest and Taxes

₱8,940.00 ₱ 8,797.00 1.01%
(EBIT)
Horizontal analysis, sometimes referred to as trend analysis, is a way of examining
financial statements that displays changes in the quantities of related financial statement items
over time.
Most Recent Value−Base Value

Horizontal Analysis =
Base Value
Pilipinas Shell Petroleum Corporation does not normally employ this strategy because the
percentage of each year is more important to them. This will display the value for the two
successive years in order to see the % outcome.
5.7 Summary and Conclusion (IFE)
Internal Factor Evaluation Matrix (IFE) Strength Weight Rating Weighted
Score
Good Store Locations .06 4 .24
Good Corporate Image .16 4 .64
Skilled Managers and Employees .14 4 .56
High-Quality Brands .14 4 .56
Responsible Energy Provision (Eco-friendly advocacies) .10 3 .30
Internal Factor Evaluation Matrix (IFE) Weaknesses Weight Rating Weighted
Score
Corruption in oil business .10 1 0.10
Shell market research is not up to date .15 1 0.05
Crude oil price .15 2 0.10
Total: 1 2.55
Total Weighted Score: 2.55
1 = "major weaknesses"
2 = "minor weaknesses"
3 = "minor strength"
4 = "major strength"
STRENGTHS:
1. Good Store Locations
Rating given – 4
Pilipinas Shell has had a critical role in determining the country's transportation future. It
is recalibrating its gas stations and transforming its retail business model into what are now
known as mobility stations. The Shell Mobility Station is a convenient one-stop shop where
clients can get fuel-related items as well as car maintenance inspections through the Shell Helix
Oil Change+ and car wash services. By doing this, it has become a major strength for Shell as it
offers easier access to all of its clients.
Source:
https://pilipinas.shell.com.ph/media/current-year-press-releases-news/first-of-the-next-
generation-shell-stations-in-north-luzon-rises.html
2. Good Corporate Image
Rating given – 4
Pilipinas Shell Petroleum Co.'s brand preference is high in customer satisfaction surveys,
indicating that Filipinos completely trust their company. By the end of 2018, their brand
preference share in the country had surpassed 40%, putting them ahead in the competition. Their
premium fuel penetration of 26% in the retail sector is also one of the highest in the industry.
They have accomplished this despite the fact that crude oil prices have been higher for the most
of the year. Additionally, they never miss a chance to assist Filipinos in the greatest manner
possible, as seen by the fact that various initiatives and projects have been established to answer
the people's needs.
Source:
2018/q-a-with-the-president-and-ceo.html
3. Skilled Managers and Employees
Rating given – 4
Shell is a big believer in the importance of its personnel. Allowing employees to grow
their talents benefits the company's competitiveness and business excellence. With that in mind,
PSPC ensures that the corporate governance committee is carrying out its responsibilities
effectively in order for all workers to adhere to the corporate governance framework's principles
and practices. Additionally, different codes of corporate behavior and ethics are introduced and
regularly improved in order to provide a friendly and convenient atmosphere for its stakeholders.
They have acknowledged the critical role of good governance in effectively increasing value for
stakeholders.
Source:
https://pilipinas.shell.com.ph/sustainability/employee-empowerment.html
4. High-Quality Brands
Rating given – 4
Pilipinas Shell's Quality and Quantity Vans take product quality assurance seriously
(SQVs). SQVs undertake unannounced product quality and quantity testing at Shell retail
locations around the country.
At selected retail locations, the SQV team checks and analyzes gasoline and diesel
products against Shell product standards. They are able to calibrate dispensers in accordance
with local regulations regarding volume delivery tolerances, as well as to read pump meters in
order to balance periodic sales against withdrawals, or gasoline bought on-site.
Source:
https://pilipinas.shell.com.ph/sustainability/pilipinas-shell-annual-and-sustainability-
report-2017/vanguards-of-product-quality.html
5. Responsible Energy Provision (Eco-friendly advocacies)
Rating given – 3
Shell is committed to meeting its clients' growing energy demands via both product and
service innovation. It is not only about the products they offer; it is also about the manner in
which they deliver. They work to ethically create and supply energy — respecting people's
dignity, ensuring their well-being, and protecting the environment. Shell adheres to
international standards when it comes to health, safety, and the environment. Additionally, they
involve communities and stakeholders in order to continually improve their performance. Shell
must also give emphasis on their eco-friendly advocacies and ensure that these initiatives are
implemented well. By doing so, these will become a major strength of the company.
Source:
2019/q-a-with-the-president-and-ceo.html
WEAKNESSES:
1. Corruption in Oil Business
Rating given – 1
Another source of weakness in the Shell oil corporation is corruption, which is mostly
caused by the governments of the nations where the company was built and by Shell employees.
This aspect should be further worked on as corruption in a certain company is inevitable unless
the leaders’ and employees’ moral compasses are correct.
2. Shell Market Research is not up to date
Rating given – 1
Shell oil's market research is out of date, which is a key flaw that allows rival oil
companies to get an advantage over them. This aspect is a major weakness of the company. In
order to increase their performance in this aspect, Shell must work more one their market
research and development to avoid giving their competitors a competitive advantage.
3. Crude Oil Price
Rating Given – 2
The price of crude oil does not remain constant. In addition, the price of oil has dropped
as a result of Covid-19, which has reduced demand for oil. Shell's assets and revenues are both
being eroded by the current low oil price. This yet again highlights the need for Shell to switch
to alternative energy sources.

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Colegio de San Juan de Letran

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

to the chosen topic will be highly beneficial to this study.

5.1 HUMAN RESOURCES AREA

Human resources is a broad discipline at Shell, supporting change management,

line with Shell's values and corporate principles.

oriented professionals. HR provides a diverse variety of employment possibilities due to its

Human Resources (HR) at Pilipinas Shell underwent a restructuring in 2018, with

focused human resource operations.

turnover, while local HR will concentrate on strategic projects.

through the HR Online Tool.

Development Planning document articulates longer-term professional objectives.

responsibility, with human resources serving as a support function. Underperformance

management, corporate executives, assisted by human resources, conduct coaching and

intended to improve the employee experience.

5.2 CORPORATE GOVERNANCE

and constant governance developments to be important to maintaining a competitive lead and

flourishing business functions. Accordingly, the objective of Shell is to incorporate honesty,

awareness of the aforementioned principles inside the business.

diversified stakeholders through its governance commitment. The Corporation's directors

company's long-term viability and success.

• Insider Trading Policy

insider trading, short term/swing transactions, unauthorized disclosure of inside information

(tipping), and trading in commodities/derivatives or shares of other publicly-traded companies

with the Corporation.

• Anti-Corruption and Anti-Bribery Policy

The Corporation has anti-corruption policies and practices in place. By implementing an

in an online Code of Conduct Register, open to countermeasures as adhered to and authorized by

with them includes these necessities.

seriously consider withdrawing.

• Anti-Sexual Harassment and Safe Spaces Policy

unwavering in its dedication to a sexual harassment-free environment. Individuals' mental

health, integrity, and self-esteem must always be protected in the workplace.

counsel, or Human Resources.

company's Code of Conduct.

• Policy Statement on Human Rights

and environmental preservation as a founding member of the UN Global Compact Network

people, and demand the same of their partners.

civil degree of consanguinity or affinity, legitimate or common-law, major shareholders or

that are required for the Company's daily operations.

• Environmental, Social, and Governance (ESG) Policy

report's content before release.

• Policy on Health, Safety and Welfare of Employees

posing a substantial safety risk are properly trained and skilled.

• Employee Training and Development Policy

personal progress, but also the success of their company.

personal growth, as well as professional advancement based on potential. They have a

basis by workers and their line managers.

associated with pursuing appropriate further education.

as well as mentorship and professional development.

• Product Quality and Responsible Innovation

passes the SQV exam.

5.3 CORPORATE SOCIAL RESPONSIBILITY

and entrepreneurship development; and environmental stewardship.

• Pilipinas Shell Foundation - Roots To Shoots Program

Camarines Sur (WVDF).

Disease-related malnutrition is one of the leading causes of growth retardation.

nutrients at their roots in order to grow.

program by visiting each organization's social media sites.

• Philippine Global Road Safety Program

Collaboration with different local communities on Project KALSADA (Kabataang Ligtas

PGRSP is a non-governmental organization whose goal is to promote road safety in the